AGRICULTURE

SECTORS OF ECONOMY

                                                                 Agriculture 

1. Current Status of Indian Agriculture -

• In the decade of 1950, the contribution of agriculture in GDP was more than 50% but at present it has decreased to approx 17.6%. But even today more than 50% of the population is dependent on agriculture for employment.

• Therefore, per capita income in the agriculture sector is approx 6426 ₹ / month. [National Sample Survey Organisation (NSSO) - 2012-13]

• In the initial years, food grain production in India was extremely low.

• India was dependent on imports for food requirements.

• At present, agriculture production has increased.

• Last year it was 275 Million Metric Tonnes which is more than India's food requirements but per hectare productivity is still extremely low.

• Rice and Wheat crops are produced the most in India [approx 210 Million Metric Tonnes].

• For pulses and oilseeds, India is still dependent on imports.

• There are excessive fluctuations in agriculture growth rate due to which income does not remain uniform.

2. Problems of Agriculture -

① Size of land holdings in agriculture is decreasing.

• 86% farmers are in Small and Marginal [less than 1 hectare] category.

  • [Between 1H and 2H]

• Due to small size of holding, capital investment cannot be done in the agriculture sector.

• Agriculture documents are not clear due to which the number of land disputes (Land Records) has increased which affects investment.

② Indian agriculture is mainly dependent on monsoon for irrigation but monsoon is extremely irregular, hence Indian agriculture is called 'Gamble of Monsoon'.

• Only 34% agriculture area is irrigated.

• There are 4 main sources of irrigation - (i) Well (ii) Pond (iii) Canal (iv) Tube well

• With time, irrigation from canals and tube wells has increased.

• Agriculture cost has increased due to irrigation from tube wells and exploitation of groundwater has increased.

• Water loss occurs due to evaporation in canal area and salinity and alkalinity of land increases due to excessive irrigation.

• Due to non-repair of canal on time, the area around the canal becomes marshy.

③ Problem of Seeds -

• For seeds, the farmer depends on old crops whose quality and productivity is not high.

• There is a lack of certified seeds in the market.

• Various types of controversies were also raised about GM crops (Genetically Modified).

④ Fertilizer -

• In the form of fertilizer, N, P and Potash are required.

• Its ideal ratio is 4:2:1.

• Subsidy is given on fertilizer by the Indian government due to which imbalance has arisen in nutrients.

• Current N:P:K ratio is 6.7 : 4.2 : 1.

• Situation is even worse in Haryana and Punjab.

• Due to excessive use of chemical fertilizers, the quality of land is affected.

• Fertilizers are not even available on time and Black Marketing is done on a large scale.

⑤ Agriculture Loan -

• Main sources of agriculture loan are friends, relatives, moneylenders, cooperative societies and banks.

• Even today 40% farmers depend on moneylenders for their loan requirements.

• Most agriculture loans are short-term due to which capital formation cannot take place in agriculture.

• Benefit of agriculture loan is mainly taken by big farmers.

• There is no formal agreement (Land Leasing) between the person doing farming and the owner of the land due to which agriculture loan is not available.

• Credit discipline is decreasing due to agriculture loan waiver.

⑥ Insurance / Agriculture Insurance -

• Insurance facility is available to only 30% farmers.

• Premium amount of insurance is high.

• All types of risks are not included.

• Delay is done in payment of insurance amount.

⑦ Problem of Mechanization -

• There is a lack of machines in agriculture.

• Various types of land are available in India but land-centric equipments have not been developed.

⑧ Lack of scientists in the field of agriculture.

• Farmer depends on friends or other farmers for advice.

• Research work is also not being done in the field of agriculture.

⑨ Problem of Agriculture Marketing -

• Agriculture Produce Marketing Committee (APMC) - Act was passed by all state governments under which agriculture produce can be sold only in Mandi to license holder traders due to which following problems arise - (i) Transport cost increases.                                                                                                                                                                                                                  (ii) Various types of taxes are imposed in Mandi.                                                                                                                                                           (iii) A group is formed by the traders of Mandi due to which the process of auction is                                                                    not done in a proper way.                                                                                                                                                                                                               (iv) There is a lack of infrastructure in Mandi -e.g. Quality testing laboratories and                                                                            storage arrangement.                                                                                                                                                                                                                        (v) A chain of intermediaries is formed between farmer and consumer.                                                                                                (vi) Product becomes expensive for consumer and farmer does not get fair price.

⑩ Food Processing -

• In India agriculture products are mostly sold in primary stage.

• There is a lack of food processing because investment is high in this and marketing and market study is also required.

3. Solutions - 

(1) Collective and cooperative farming is promoted. 

(2) Computerization of land records is being done so that land disputes can be reduced. 

(3) Model Land Leasing Act has been made by the Central Government. Along with this Contract Farming is being promoted. 

(4) Pradhan Mantri Krishi Sinchai Yojana was started to increase irrigation facility. * In this old pending projects are completed and old water sources are revived and to increase the efficiency of water use, drip irrigation and sprinkler irrigation is promoted. * It has two main components - (i) Har Khet Ko Pani (Water to every field) (ii) Per Drop More Crop

(5) Seed Certification Agency has been established by Rajasthan Government which makes certified seeds available.

(6) Soil Health Card scheme has been started to maintain the balance of nutrients in the land in which information about nutrients is given to the farmer after testing the land.

(7) Neem Coated Urea is being used to stop black marketing of Urea.

(8) Target of 11 Lakh Crore has been kept for agriculture loan in the year 2018-19. * Cooperative societies are being strengthened. * Financial inclusion is being promoted.

(9) Pradhan Mantri Fasal Bima Yojana has been started to provide insurance facility. * Target of 50% insurance coverage has been kept in this. * Premium rates have been limited. * For Kharif crop => 2% ,* Rabi => 1.5%, * Horticulture  => 5%

->Technology is also being used for insurance payment.**
->e.g. Smart Phone, Satellite images etc.**

(10) New agriculture universities have been established. * DD Kisan has been started to provide scientific advice to farmers. * [A dedicated channel]

(11) e-NAM (Electronic National Agriculture Market) scheme has been started by the government under which 585 agriculture mandis have been connected to an electronic network. * Online auction can be done for agriculture produce.

(12) 22000 Haat Bazaars will be converted into GRAM (Grameen Agriculture Market).

(13) Pradhan Mantri Krishi Sampada Yojana was started to promote food processing.

(14) First Agriculture Export Policy has been issued.

Land Reforms -

(1) Zamindari Abolition - * Under this Zamindari system was abolished so that intermediaries between farmer and government can be removed.

(2) Land Ceiling (Hadbandi) - * Under this the maximum limit of land under a farmer was determined. * Additional land was acquired by the government so that it can be distributed among landless.

(3) Tenancy Reform (Kashtkari Sudhar) - * Under this security has been provided to tenants.

(4) Land Consolidation (Chakbandi) - * Under this consolidation of land was done so that agriculture cost                                                                                                                   can be reduced.

4. Green Revolution -

• India became self-reliant in terms of food grains through Green Revolution.

• Norman Borlaug is the father of Green Revolution in the world.

  • High productivity varieties of wheat were prepared by him which are called Dwarf Wheat.

• Green Revolution started in India in 1967.

• M.S. Swaminathan is the father of Green Revolution in India.

• High productivity varieties were ordered from Mexico and hybrid seed was prepared which was called Sonar-64.

• Loan, fertilizer, irrigation facility and MSP facility were made available by the government.

• Punjab, Haryana and Western UP were chosen for Green Revolution.

(1) Benefits of Green Revolution -

(i) India became self-reliant in terms of food grains. 

(ii) Agriculture imports reduced. 

(iii) Farmers' income increased. 

(iv) Scientificization of agriculture took place. 

(v) Agriculture infrastructure was prepared. 

(vi) Investment in agriculture increased. 

(vii) Public Distribution System started due to government procurement.

(2) Negative Impact - 

(i) Benefit of Green Revolution was received only by regions of Punjab and Haryana. 

(ii) Farmers of Eastern India lagged behind.

(iii) In Haryana - Punjab also the benefit of Green Revolution was received by big farmers, small farmers lagged behind.

(iv) Imbalance arose in crop cycle, more attention was paid only to Wheat and Rice, production of Pulses and Oilseeds did not increase.

(v) Agriculture cost increased due to which debt burden on farmers started increasing.

(vi) Over exploitation of natural resources took place, groundwater level fell.

(vii) Quality of land decreased due to use of chemical fertilizers.

• Due to these negative impacts Evergreen Green Revolution was announced.

5. MSP (Minimum Support Price) -

• That minimum price at which agriculture produce is bought by the government.

• It is issued by the Cabinet Committee on Economic Affairs.

• Its recommendation is done by Commission for Agriculture Cost and Prices (CACP).

• It is issued for 23 crops.

  • MSP for 22 crops [14 Kharif, 6 Rabi and 2 other crops]

  • For Sugarcane FRP (Fair and Remunerative Price)

Objectives - 

(i) To provide income security to farmer 

(ii) Food security can be made available to citizens through government procurement (iii) Price of                             agriculture products can be regulated 

(iv) Crop Pattern can be influenced * Some crops can be encouraged and some can be discouraged.

Calculation of MSP -

(1) A2 = Total cost of agriculture inputs * e.g. Seed, Fertilizer, Wages

(2) Cost of family labor is included in this * A2 + FL = A2 + family labour

(3) C2 = A2 + FL + Rent paid on owned capital * Comprehensive cost * e.g. Own machine, land * MSP is always greater than C2. MSP > C2

(4) C3 = C2 + 10% of C2 Managerial cost * C3 is calculated but it is not used.

• In Budget 2018-19, MSP has been made 1.5 times of the cost.

6. Public Distribution System [ PDS ] -

• PDS started in India in the decade of 1960.

• Targeted PDS was started in 1997.

• In 2013 its universalization was done and National Food Security Act (NFSA) was passed.

Objectives - 

(1) Food security is made available to Indian citizens especially poor and deprived section. 

(2) Removes imbalance of food production, food product is sent from surplus production state to deficit                production state. 

(3) Food products are available to consumer at fair prices.

(4) Supply of food products is regulated in the market. 

(5) System of MSP is implemented. * [Through PDS]

Problems of PDS - 

(1) Procurement is not done on time by FCI. 
(2) FCI does not have sufficient storage capacity.

• Scientific methods are not used for storage. 

• Problem of Leakage is also seen in transportation. 

• Difference between Central Issue Price and Purchase Price is Food Subsidy.
• This subsidy is not made available on time by the Central Government. 

• There is also a lack of awareness about Fair Price Shops. 

Solutions -

(1) To remove the error of exclusion, universalization of beneficiaries was done and NFSA was passed.

(2) Aadhaar verification was used to remove the problem of ghost beneficiary and duplicate beneficiary. 

(3) Digitization of Ration Card is being done. 

(4) Decentralized procurement is being promoted to reduce transport cost. 

(5) GPS Tracking is being used to reduce the problem of leakage. 

(6) Shanta Kumar Committee was formed for reform in FCI.

Recommendations - 

(i) In states where state governments are capable of procurement, decentralized procurement should be            promoted. 

(ii) Private warehouses should be used by FCI. 

(iii) Ultra-modern technologies and scientific systems should be used for storage. 

(iv) A minimum limit should be determined for buffer stock, excess grain from this should be automatically              sold in open market. 

(v) The number of beneficiaries in National Food Security Act should be reduced to 40%. (vi) Food subsidy              should be deposited directly into beneficiary's account.

7. Direct Benefit Transfer (Pratyaksha Labh Hastanantaran) -

• Under this the benefit of government schemes is deposited directly into beneficiary's account.

• It started on 1 Jan., 2013.

• DBT got boost after Aadhaar card and Pradhan Mantri Jan Dhan Yojana.

Benefits of DBT - 

(1) Chain of intermediaries is eliminated. 

(2) Transparency is brought in benefit transfer. 

(3) Problem of ghost beneficiary and duplicate beneficiary is removed. 

(4) Transfer of benefit is done on time. 

(5) Corruption has reduced and accountability increases. 

(6) Financial inclusion gets encouragement. 

(7) Distortion of market is removed and 

(8) Beneficiary can purchase goods at his own level. 

(9) Digital payment gets encouragement. 

(10) Administrative cost of government decreases.

Challenges - 

(1) Financial inclusion is not complete. 

(2) Banking facilities are not available in rural and remote areas. 

(3) Problems arise in receiving benefits especially for women. 

(4) Problem arises in determining the benefit. 

(5) Benefit is not linked with inflation. 

(6) Misuse of benefit can also be done. 

(7) Problem arises in selecting the beneficiary.